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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

New Hampshire Life, Accident & Health exam — 33 practice questions.

Subtopics: Risk reduction, Speculative risk, Morale hazard, Insurable risk, Reinsurance, Handling risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Contract of adhesion, Utmost good faith, Unilateral contract, Conditional contract, Express authority, Apparent authority, Fiduciary duty, Reciprocal insurer, Estoppel, Insurable interest timing

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Sample questions & answers

1. Deciding to install sprinklers to reduce the chance and severity of fire loss is an example of risk:

Reduction

Risk reduction involves taking steps, such as installing sprinklers, to lower the frequency or severity of loss.

2. Which of the following is a speculative risk that is generally not insurable?

Investing in the stock market for potential gain

Speculative risk involves a chance of gain as well as loss, such as investing, and is generally not insurable.

3. A person who is careless because they have insurance demonstrates a:

Morale hazard

A morale hazard is an attitude of indifference to loss because the person has insurance.

4. Which characteristic is generally required for a risk to be insurable?

The loss must be definite, measurable, and due to chance

An insurable risk generally must involve losses that are definite, measurable, and the result of chance, among other characteristics.

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Practice: General Insurance Concepts

Take a randomized, timed-style practice test. Answer choices are shuffled and your results are scored instantly with an explanation for every question.

Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.